John DiStaso's Granite Status: Sans dice, how will Hassan roll now?

WHAT NOW, GOVERNOR, LAWMAKERS? It’s unclear what Gov. Maggie Hassan has in mind to raise revenue or cut spending now that her top revenue priority, casino gambling, is dead. But there’s one place she surely won’t turn.

If any lawmakers who opposed gambling and its promised state money bonanza were secretly hoping Hassan would flinch on her promise to veto an income or sales tax, they can forget about it.

It is simply not going to happen, her spokesman and a top Democratic Party official said Friday.

Hassan pledged to veto a broad-based tax during her successful campaign for governor, and "absolutely nothing has changed in her opinion on that," said spokesman Marc Goldberg.

"She believes a sales or income tax would be wrong for New Hampshire, that our economy has worked well without them. She continues to oppose them and would veto either if it came to her desk," he said.

There’s nothing vague about that. But does the governor have any specific proposals to deal with the loss of the revenue not only from casino gambling but also from the gasoline tax hike, which also died last week?

She did not specifically back the gas tax hike bill, but was open to it. It was killed by the state Senate in a lopsided 18-6 bipartisan vote on Thursday, the day after the House killed the casino bill, 199-164.

Does she now have a "Plan B" to meet her priorities of additional funding for higher education and services for the mentally ill, among other things?

"Right now," said Goldberg, "the state Senate is working through its budget process. We will continue to work with members of both parties, from both chambers, to reach a balanced budget. That’s the governor’s priority."

With the House and Senate clearly at odds, "We’re going to have to come together to determine how to move forward with a balanced budget because at the end of the day, we’re going to have a balanced budget," he said.

The governor had included in her proposed budget $80 million in revenue from application fees for a license to open a single casino in southern New Hampshire.

Separately, she proposed a 20 cent hike in the cigarette tax, on top of a 10 cent hike that is slated to take effect automatically on July 1, for a total of $30 million in new revenue. The House cut the proposed hike to a total of 20 cents, for $20 million. The Senate killed that on Thursday, too.

The Senate’s stake in the heart of the gas tax hike was an apparent retribution for the House action on gambling.

While some senators may have been thinking "payback," Sen. Andy Sanborn, R-Bedford, who made the motion to have the Senate indefinitely postpone the tax hike, told us Friday that for him, it was "certainly not retribution."

How could it be, he said, when he was among the eight senators who opposed casino gambling in March?

He said his aim was to clearly stake out the Senate’s position as the two bodies move toward a committee of conference next month on the budget.

"I want to make sure we’re not raising taxes and fees on the people of New Hampshire," he said. "Now a gas tax is off the table once we go to conference."

The House-passed plan, comprising three years of 4 cent increases (and six years of 2 cent hikes for diesel fuel) would have raised for the state highway fund about $29 million in fiscal 2014, about $58 million in 2015, and about a half-billion over the next decade.

WHO’S TO BLAME? It’s true, as Goldberg said, that the budget is now in the hands of the state Senate. The governor offered her budget plan way back in February and then it was on to the House, which removed the $80 million from casino licensing. That’s the way the process works.

Officially, it’s out of her hands until a final budget eventually is approved by the House and Senate and comes back to her desk.

But some say that before putting $80 million in her budget from a casino that had not yet been authorized by the Legislature and that she had to know would face an uphill battle in the House, Hassan should have had an alternative approach ready.

And maybe she does have a secret plan that she will discuss privately with lawmakers.

But Republican Party Chair Jennifer Horn, says the Democratic governor should now go public with her back-up ideas, if she has any.

Noting that the House is controlled by Hassan’s party, the Republican Party said she should not "remove herself from the budget process" and should, said Horn, "submit a new proposal that will balance the state’s books without raising taxes.

"Granite Staters can’t afford to have their governor sit on the sidelines for the reminder of the budget process and refuse to perform the job that she was elected to do," Horn said.

SOME DEMS "MORALLY OPPOSED" TO GAMING. Kathy Sullivan, the Democratic National Committeewoman and former state party chair, said that although broad-based taxes have long been off of the New Hampshire political radar screen, there are still Democrats who hold out hope for one.

She said many Democrats remain "morally opposed to gambling and a number of those people, a good percentage, also support a broad-based income tax.

"It’s kind of a coincidence, but it’s just a fact," she said.

"But what amazed me is the lack of willingness (by opponents of both parties) to recognize the amount of gambling we already have in New Hampshire, with all of the under-regulated charitable gaming, and it continues to grow and grow," Sullivan said.

"It’s as if they don’t see it, but it’s there."

BREAKING IT DOWN. The 400-member House has three vacancies, 218 Democrats and 179 Republicans.

A total of 363 of the 397 members participated in the key vote Wednesday.

Ninety-two Democrats joined 107 Republicans in voting to kill the bill, while 112 Democrats and 52 Republicans voted to keep the bill alive and open for debate on 15 amendments that were waiting in the wings but never saw the light of day.

Each party now points to the other as being responsible.

"There is no question the Republicans were trying to kill the bill for political reasons," said Sullivan, noting the GOP’s 2-1 ratio against. "Why would they gift-wrap a victory for the governor?

"They wanted to hurt the governor even if it meant going against sentiment in their own communities."

Republicans counter that their margin should not be a surprise because Republicans have long opposed gambling in lopsided numbers.

They say the Democrats killed it by not following the Democratic governor in large enough numbers.

They say Hassan showed a lack of leadership by failing to win over about half of the Democrats, including 10 Democratic committee chairs, such as Finance Chair Mary Jane Wallner and Ways and Means Chair Susan Almy.

Speaker Terie Norelli insisted last week after the vote that she was not just publicly neutral, but truly neutral.

Leadership members who voted to keep the bill alive included Melanie Levesque, Deanna Rollo and Stephen Spratt.

Sullivan said Hassan has made her budget proposal and, contrary to what the GOP contends, now it’s up to the lawmakers of both parties to find revenue "to meet priorities and repair the infrastructure.’’

"They made this decision in contradiction to a very popular governor, who won making it clear in the campaign that this (gambling) was an important part of her platform."

Sullivan also noted that organized labor, such as the AFL-CIO, the New Hampshire Building Trades Council and the Professional Fire Fighters of New Hampshire, backed gambling, but there are "some Democrats in the House who apparently don’t care about what labor wants."

ABOUT THOSE ROADS. House Public Works and Highways Chairman David Campbell, D-Nashua, championed the gas tax hike and also supported gambling.

He said he "never heard a word" about broad-based taxes motivating some opponents to the casino, and besides, he said, such taxes are "out of the realm of possibility."

As for the gas tax, he said he had initially been told by Senate Republicans that it would be tabled or re-referred to committee, which would have left the door open for consideration later this session.

"But after the gambling vote, I was told indirectly there was a change and it would be indefinitely postponed.

"How the Senate and House are going to handle each other on the budget is cause for concern," he said.

But the gas tax hike death "really means devastation for the highway fund and for our roads and bridges going forward. And there is no money to finish Interstate 93 now.

"It used to be there was a gambling bill and a gas tax — choose one," Campbell said. "Now we have neither, and the gas tax is off the table for this session. We have a $250 million shortfall which will not be funded, and therefore I-93 will not be done."

Campbell will ask Transportation Commissioner Chris Clement to tell his committee in the next few weeks "what this means in terms of how the I-93 project will come to a halt. There are certain contracts out that have a certain life span, and when they end, instead of rolling into the next part of the project, they’re going to stop."

In addition, he said, a "huge deficit" in the DOT budget will slow its attempt to address deteriorating roads and red-listed bridges and force layoffs.

"And they’re going to have to at least look at the possibility of cutting back municipal aid," he said.

But Republican Sanborn said the state is spending $600 million a year on roads and bridges, 20 percent more than in 2008.

"And some of us remain concerned we are still diverting 37 percent of what we raise for roads to other projects," he said. "It makes it difficult to tell people that we need to raise their taxes to fix roads when we’re not using all the money to fix roads.

While all of the money from Campbell’s proposed 12 cent tax increase would have been used for roads and bridges, some money from the current 18 cent tax is used elsewhere.

"I believe you’ll see a bill next year to deal with that problem," Sanborn said. "We all recognize that a basic obligation of government is to maintain and fix our roads and keep people safe."

John DiStaso is senior political reporter of the New Hampshire Union Leader and New Hampshire Sunday News. He has been writing the Granite Status political column since 1982 and can be reached at jdistaso@unionleader.com. Twitter: @jdistaso.